SME Week: How to exit your business with confidence

Exiting a business is a life-changing event

For most owners, exiting the business they have founded and grown, usually with a sizeable dose of blood, sweat and tears, is a life-changing event.

Not all exits come equal – it’s important to have the right advisers in place to guarantee a “good” exit that both secures the future of the business and achieves your objectives.

Whether planning an exit in months or in years, there are several things SME business owners should be clear on:

It’s never too early to think about your exit strategy

Ideally, business owners should start to plan an exit two to three years in advance with a focused, strategic approach. Of course, circumstances can change, but the more time to carefully plan, the better the chances are to have the right infrastructure in place to achieve a successful exit.

Be clear on your purpose and end-goal

There are numerous avenues by which an owner can exit their business, including management buy outs, succession planning if it’s a family business, or perhaps via sale to a trade buyer or institutional investor. It’s important to be clear on your aims as each option will have different ramifications with regards to your future commitment to the business.

For example, if it’s a clean break you’re aiming for, then a sale to private equity may not be the best option if you’re required to retain a stake in the business. In other instances, a partial exit could be an exciting proposition if you wanted to be a part of, and share in, your businesses future growth. It’s a very personal decision that must be given careful consideration.

Don’t discount alternative options that aren’t immediately obvious. For example, Employee Ownership Trusts have been growing in popularity, an option that is a good fit culturally for some businesses, while providing attractive tax benefits.

Look beyond headline figures

Engage with a corporate finance advisor early in the process to understand, and maximise, the value of your business. Their expert guidance will also be crucial in understanding the bigger picture, preventing a situation where you are drawn in by headline price without giving due attention to the conditions attached to the deal and whether it meets your objectives.

The right team of advisors will be central to achieving the exit that’s right for you and your business.

JMW Solicitors’ expert Corporate team can support you in exiting your business with confidence.

Mark Heppell, is a partner at JMW Solicitors